China Eases Contamination Thresholds…Slightly

Though Chinese import restrictions have targeted all materials, scrap paper received a disproportionate blow as Jinping’s government officials planned to reduce the acceptable level of contamination for recycled paper loads to 0.3 percent, intending to fully implement the changes by the end of 2018. For reference, the current standards demand scrap paper imports have no more than 1.5 percent contamination by weight – for plastics that limit is 0.5 percent.

Insiders from across the industry, including leaders from the Institute of Scrap Recycling Industries (ISRI), protested, claiming the threshold is impossible and would essentially amount to an outright ban.

These new standards would be enforced beginning March 1st, 2018; however, these standards are tentative. Comments on the current filing can be submitted to the WTO by December 15th, 2017.

Despite strict government policies, contamination levels have mostly been determined by manufacturing needs.

Though the Chinese government has set new restriction guidelines, implementation will depend on enforcement. Historically, scrap imports with higher rates of contamination have been allowed through Chinese ports. For example, scrap paper has been accepted with varying rates of contamination, from 1 percent to 5 percent depending on the grade – similar levels have also been recorded in recycled plastic imports.

According to ISRI officials, “These numbers were determined through an open and deliberative process within the global recycling community, and reflect manufacturing standards and needs.”

Organizations representing the recycling industry, including the National Recycling Coalition (NRC), have called on China’s government to defer to industry conventions, as the current allowable limits represent widely-accepted standards based on consumer needs – to disrupt these standards would be to disrupt trade across the dozens of countries that adhere to them.

In the past, there were multiple sets of standards, including from the Chinese government, the widely-used ISRI specifications, and the buyers – and, the majority of the time, buyer demands have superseded all other official standards. Given the past and China’s propensity for secrecy, it remains to be seen whether their policies will be widely enforced.

China’s desire to build up larger paper mills is no surprise. Though the government largely blames pollution and health hazards originating from waste imports on other countries, the sheer number of domestic mills makes environmental regulations near impossible to implement. Many of the smaller Chinese mills have largely ignored waste-handling mandates.

According to public notices distributed by China’s environmental department, domestic mills with processing capacities of less than 300 thousand tons per year will not receive import permits for 2018. Scrap material brokers are also essentially being pushed out, as the notices announced import permits will be limited to companies that process scrap. For all other importers, permits for 2018 have yet to be issued.

Though China appears to be responding to complaints by slightly easing contamination restrictions, the recycling industry should still plan for a market without China. If you want to see how your business can thrive in these uncertain times, contact our industry veterans at Berg Mill Supply. As we have done in the past, Berg Mill continues to work hard on creating solutions to overcoming fluctuating commodity markets, including opening markets in other countries, forging strategic alliances, and improving domestic processing capabilities.